INVESTMENT INCENTIVES, WHO ARE ENTITLED TO GET?

According to current law, investors have the right to conduct investment activities in Vietnam. Among them, one of the fundamental policies is “The State has policies to encourage and create favorable conditions for investors to carry out business investment activities and sustainably develop economic sectors”. So, how are investment incentives applied and who is entitled to get in accordance with regulations?

1. Who are the investors?

Investors are defined as organizations and individuals carrying out the following business investment activities:

Domestic investor means an individual holding Vietnamese nationality or a business organization whose members or shareholders are not foreign investors (including enterprises, cooperatives, cooperative unions and other organizations that carry out business investment activities).

– Foreign investor means an individual holding a foreign nationality or an organization established under foreign laws and carrying our business investment activities in Vietnam.

– Foreign-invested business organization means an organization whose members or shareholders are foreign investors.

2. Who are the investment incentive applied to?

Projects and enterprises eligible for investment incentives are determined based on criteria and are accordingly divided into the following groups:

a. Industries and professions with investment incentives:

Investment projects in business lines eligible for investment incentives as specified.

b. Investment incentive areas

Investment projects located in the areas eligible for investment incentives as specified.

c. Investment capital scale

Investment projects with capital scale from VND 6,000 billion and satisfy the following conditions:

+ at least VND 6,000 billion is disbursed within 03 years from the issuance date of the investment registration certificate or the approval for investment guidelines; and

+ Satisfying any of the following criteria: the total revenue is at least VND 10,000 billion per year within 03 years from the year in which the revenue is earned or the project has more than 3,000 employees;

d. Social goals

– Projects on investment in social housing construction;

– Investment projects located in rural areas and employing at least 500 employees;

– Investment projects that employ persons with disabilities in accordance with regulations of law on persons with disabilities.

e. The goal of developing science and technology

– Hi-tech enterprises, science and technology enterprises and science and technology organizations;

– Projects involving transfer of technologies on the List of technologies the transfer of which is encouraged in accordance with regulations of the Law on Technology Transfer,

– Science and technology enterprise incubators prescribed by the Law on High Technologies and Law on Science and Technology;

– Enterprises manufacturing and providing technologies, equipment, products and services with a view to satisfaction of environment protection requirements prescribed by the Law on Environment Protection.

f. Creative startup project

– Start-up projects;

– National innovation centers; and

– Research and development centers.

g. Small and medium enterprises

– Investment in business in small and medium-sized enterprises’ product distribution chain;

– Investment in business in technical establishments supporting small and medium-sized enterprises, small and medium-sized enterprise incubators;

– Investment in business in co-working spaces serving small and medium-sized enterprises and startups prescribed by the Law on Small and Medium-Sized Enterprises.

>> HOW MANY FORMS OF INVESTMENT INCENTIVES ARE THERE? https://linconlaw.vn/how-many-forms-of-investment-incentives-are-there/

>> [NOVEMBER – 2023] LEGAL NEWSLETTER https://linconlaw.vn/november-2023-legal-newsletter/

3. What to note about investment incentives?

– Investment incentives shall be given to new investment projects and expansion projects.

– The level of each type of incentives shall be specified by regulations of the Law on Taxation, the Law on Accounting and the Law on Land.

– Investment incentives applied for a fixed term and on the basis of results of project execution. Noted that, every investor must satisfy conditions for investment incentives in accordance with regulations of law during the period of enjoying investment incentives.

– An investment project that is eligible for various levels of investment incentive, including investment incentive specified by Law may apply the highest level.